On 20 May 2015, the Federal Court of Australia handed down the
largest ever court imposed fine for breaches of the Subclass 457
business sponsorship program to Choong Enterprises. An operator of
restaurants and cafes in Darwin, the company acted as a sponsor for
10 employees from the Philippines, who travelled to Australia on
A 457 business sponsor's primary obligation is to ensure
that the sponsored employees are employed the same on terms and
conditions to those of an Australian employee for an equivalent
role in the same position.
Not only was Choong Enterprises not paying entitlements such as
loadings, sick leave and superannuation contributions, it was also
paying below the award minimum at approximately $12 per hour. In
addition to award minimums, the Migration Regulations also provides
a minimum salary threshold of $53,900 per annum. In this case, the
salaries being paid by Choong Enterprises to their 457 visa holders
($45,220 per annum) was below the minimum salary threshold. Thanks
to these underpayments Choong Enterprises had to pay between $6,000
- $20,000 to each of the seven underpaid employees, as well as
penalty payments to the Commonwealth, ranging from $450 - $7,000
Choong Enterprises also fabricated documents in an attempt to
prove compliance with its obligations, and recovered the fees
charged by its migration agent from the sponsored employees, which
is prohibited under the Migration Regulations.
The court penalised each of the breaches that occurred in
respect of each of the employees, and fined Choong Enterprises a
total of $175,400.
In response to this finding, Senator Michaelia Cash, Assistant
Minister for Immigration and Border Protection, said:
"The stiff penalty this company has received should send a
warning to other sponsors: if you fail to meet your requirements,
my Department may impose administrative sanctions, issue an
infringement notice, execute an enforceable undertaking, or apply
to the Federal court for a civil penalty order. The overwhelming
majority of businesses act in good faith and therefore have nothing
to fear, but we want to send a strong message that if you breach
your obligations, you can expect to face the
True to the Minister's word, from 1 July 2015, Taskforce
Cadena is enforcing the sponsorship requirements applicable to all
approved 457 business sponsors. Headed by the Department of
Immigration and Border Protection and the Fair Work Ombudsman, the
Taskforce will also involve the Australian Federal Police,
Australian Securities and Investment Commission, Australian Tax
Office and other agencies.
If you are currently an approved business sponsor and/or employ
457 visa holders in your business, it's perhaps an opportune
time to make sure you're meeting your sponsorship
The 10 key requirements are to:
Ensure equivalent terms and conditions of employment
pay travel costs to enable sponsored persons to leave
pay costs incurred by the Commonwealth to locate and remove
provide records and information to the Minister
co-operate with inspectors
provide information to the Department when certain events, such
as termination of employment occur
ensure the sponsored person works in the nominated
not recover certain costs such as migration agent costs from
the visa-holder, and
ensure that you are contributing to the training of Australians
in your industry.
Recent amendments to the Migration Act and regulations, along with the imminent commencement of the new federal safety net under the Fair Work Act, highlight a number of issues for consideration by employers in documenting terms and conditions of employment for foreign nationals engaged to work in Australia under Subclass 457- Business (Long Stay) visas.
A quick refresher of the rights and obligations for employers (sponsors) when ending a 457 visa holder's employment.
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